The Vocabulary of Forming an LLC

Administrative Dissolution

An action taken by a state government to officially terminate an LLC's legal existence due to statutory non-compliance, such as failing to file required annual reports or maintain a registered agent. For example, under Georgia Rules, failing to file an annual registration risks administrative dissolution by the Secretary of State. Once administratively dissolved, an entity loses its legal authority to conduct business under its state registration until reinstated.

Annual Registration

A periodic filing required by select states to update basic corporate information and maintain active standing. In Georgia, domestic LLCs must file an annual registration for a $60.00 fee (applicable to both online and paper filings), due between January 1 and April 1 of the year following formation. Georgia law allows LLCs to file up to 3 years in advance, assesses a $25.00 late penalty for overdue filings, and charges $30.00 for an amended annual registration.

Annual Report

A compliance filing submitted to state authorities to maintain an LLC's active standing and update operational details. In Florida, where formation is governed by Section 605.0201 of the Florida Statutes and the Division of Corporations gives no legal advice, the annual report fee is $138.75, but reports received after May 1 incur a $400 late penalty, bringing the total fee to $538.75. Florida also charges $50 for an amended annual report, $25 for an Articles of Correction filing, $25 to change a registered agent, $30 for a certified copy, and $5 for a Certificate of Status.

Annual Statement

A statutory reporting requirement used in specific states, such as Michigan, where LLCs submit yearly updates to keep state records current. Unlike states that label this filing an annual report or annual registration, Michigan uses the term annual statement for the same ongoing compliance purpose. Failing to submit this annual statement can jeopardize an LLC's active standing with the state.

Articles of Organization

The foundational legal document submitted to a state business filing agency to officially form a domestic limited liability company. Filing fees vary by state: California charges $70.00, Georgia charges $110.00 ($100 filing fee plus a $10 service charge), and New York charges $200.00. In New York, the articles must designate a specific county, with New York City boroughs mapping directly to their corresponding counties, while Florida charges a $100 filing fee plus a $25 registered agent fee for a total initial filing cost of $125.00.

Assumed Name

A registered name under which a business operates that differs from its official legal entity name, commonly known as a DBA (Doing Business As) or trade name. In Texas, an LLC files an assumed name certificate with the Secretary of State for a $25.00 filing fee. Operating under an assumed name allows an LLC to market services under a secondary brand without creating a separate legal entity.

Beneficial Ownership Information

Information regarding the natural persons who ultimately own or control a business entity. Under federal Financial Crimes Enforcement Network regulations effective August 14, 2026, entities created in the United States are exempt from federal BOI reporting requirements. Similarly, state level reporting under the New York LLC Transparency Act applies exclusively to LLCs formed under the laws of a foreign country, meaning US-formed LLCs are not required to file.

Biennial Statement

A periodic information report required every two years by certain state jurisdictions to maintain active state records. In New York, LLCs submit a Biennial Statement to the Department of State for a $9.00 fee. In addition to this report, New York imposes an annual filing fee on Form IT-204-LL ranging from a $25 minimum up to $4,500 based on New York source gross income.

Certificate of Formation

The official formation document required in certain states, such as Texas, in place of Articles of Organization. In Texas, filing Form 205 with the Secretary of State costs $300.00, is available online through SOSDirect, and incurs a 2.7% convenience fee if paid by credit card. Because Texas does not issue a general business license, filing the Certificate of Formation establishes the entity's legal authority to operate.

Certificate of Publication

An official document submitted to state authorities confirming that an LLC has fulfilled its legal requirement to publish notice of its formation in local newspapers. In New York, after completing mandatory newspaper notices for six consecutive weeks, the company submits this certificate along with affidavits of publication to the Department of State for a $50.00 fee.

Certificate of Status

A state-issued document certifying that an LLC is lawfully registered and authorized to transact business in the jurisdiction. Also referred to as a Certificate of Good Standing, this document is frequently requested by lenders, landlords, or government agencies. In Florida, the Division of Corporations issues a Certificate of Status for a $5.00 fee.

Employer Identification Number (EIN)

A unique nine-digit tax identification number issued by the Internal Revenue Service to identify business entities for federal tax administration. Obtaining an EIN is $0 (free) directly from the IRS website, and business owners should never pay a third party for an EIN. An LLC must be officially formed with the state before applying for an EIN.

Foreign Qualification

The legal registration process required for an existing LLC to conduct business in a state other than the one in which it was originally formed. Qualifying as a foreign entity grants authorization to transact business across state boundaries while maintaining compliance with local state tax and filing requirements.

Franchise Tax

A state tax levied on business entities for the privilege of existing or transacting business within that jurisdiction. In California, the Franchise Tax Board imposes an annual LLC tax of $800 per year, due on the 15th day of the 4th month after filing with the Secretary of State, with the previous first-year $800 exemption having expired for tax years beginning on or after January 1, 2024. However, California LLCs can avoid the first-year $800 tax by filing a short form cancellation within one year of registration.

Good Standing

The official legal status indicating that an LLC has complied with all ongoing state administrative requirements, including submitting mandatory reports and paying required state fees. Maintaining good standing protects an LLC's limited liability status, corporate name rights, and legal standing to enforce contracts or bring suits in state courts.

Manager-Managed

An LLC management structure where operations and business decisions are delegated to appointed managers, who may or may not be owners of the business. Members retain financial ownership and voting rights on major structural actions but do not manage day-to-day operations.

Member-Managed

The default LLC management structure where all owners (members) actively participate in operational decisions and daily business management. In a member-managed LLC, each member possesses general authority to sign contracts and bind the entity in ordinary business affairs.

Operating Agreement

An internal governing document that details the ownership percentages, member roles, capital contributions, voting rights, and operating rules of an LLC. Under California law, an operating agreement is required, though the agreement is kept internally with business records and is not filed with the state.

Publication Requirement

A statutory rule in select jurisdictions requiring a newly formed LLC to publish public notices of its formation in local newspapers. New York mandates that LLCs publish notice in two county newspapers for six consecutive weeks; failure to complete publication within 120 days suspends the LLC's authority to do business in the state.

Registered Agent

An individual or authorized entity designated to accept legal process, notices, and official government correspondence on behalf of an LLC. In both California and Texas, an entity cannot act as its own registered agent, and Texas law warns that failure to maintain a registered agent risks involuntary termination. In Florida, changing a registered agent with the state carries a $25.00 fee.

Registered Office

The physical street address within the state of formation where an LLC's registered agent must be available during normal business hours to receive legal documents. A registered office must be a physical geographic location in the state and cannot be a P.O. Box.

Resident Agent

The state-specific term used in jurisdictions like Michigan to identify a registered agent responsible for receiving legal service of process and state correspondence. Although the terminology differs from registered agent, the statutory role and compliance functions are identical.

Revocation

The official cancellation or termination of an LLC's registration and legal authority by state authorities due to severe non-compliance. Revocation often occurs following unaddressed administrative dissolution, persistent failure to maintain a registered agent, or unpaid state taxes.

Statement of Information

A mandatory periodic compliance report required by California to keep business addresses, officers, and managers updated in public records. In California, the Statement of Information carries a $20.00 fee and must be filed within 90 days of initial registration, then every 2 years thereafter; failure to file this statement causes entity suspension or forfeiture.